Thanks a lot Ipisanec for that information.
I do not know how to check what image profiles are being embedded or not embedded with the images in the exported pdf. I don't know how to find this information in Acrobat.

What I did notice is that the exported pdf image using AS IS in Quark 10.5 ( or 9.5.4.1) looks different to the exported pdf image when using color options with the setup defined as Adobe RGB 1998 perception. In both cases the input profile is 16 bits Adobe RGB perceptual.
What is strange, is when I import the pdf's back into Photoshop, the AS IS looks close to the original image (paste the exported pdf image over the original and erase an arbitrary path) while the exported pdf image with quark color managed with an output profile is too saturated.
Hence my original question.
But now I am more confused. Why does the AS IS pdf appear more accurate than the pdf with the color managed output profile?

So, if it's RGB on import, exporting using AsIs means it exports as RGB. Nothing is changed.

That is only partially correct - things that change for RGB images:
• color depth gets reduced to 8bit if input is 16bit
• original ICC-profile name is lost, output is either DeviceRGB or postscript color array
• rendering intent is completely ignored and lost
• metadata is lost

For images in CMYK or Lab the same is true and more.

• color depth gets reduced to 8bit if input is 16bit this would have subtle visual change in color but be lossy in detail
• original ICC-profile name is lost, output is either DeviceRGB or postscript colour array this could potentially visually change the colour significantly
• rendering intent is completely ignored and lost again this could visually change the colour, its also one way meaning you can't add it back in later
• metadata is lost losing filename, lens data exposure and other useful data to trace back to the original image, also without the original ICC anybody in pre-press with just DeviceRGB in a PDF has to guess as to how to convert to cmyk

That's true, but I was more referring to color space versus color depth, profiles and metadata. But good to know.DeviceRGB and CalibratedRGB are technically different Color Spaces, most RIPs would distinguish between the two and treat them differently, same is true for DeviceCMYK and CalibratedCMYK.

It is possible that when the original poster opens his pdf in Photoshop there is colour conversion at this point to AdobeRGB, (rather than just re-tagging (assigning) the DeviceRGB with the Working AdobeRGB).